eMachines posted a smaller-than-expected loss in its third quarter Wednesday but said it would cut production in the fourth quarter.
In the quarter, eMachines (Nasdaq: EEEE) lost $6.1 million, or 4 cents a share, on sales of $175 million.
Analysts were expecting a loss of 5 cents a share in the quarter.
eMachines shares closed up 6 cents to $1.25 a share ahead of the earnings report.
In the year-ago quarter, eMachines lost $2.9 million, or 4 cents a share, on sales of $155.9 million.
"The weaknesses in the PC market as well as general retail that we commented on in the second quarter has materialized and is affecting a broader segment of the economy," said CEO Stephen Dukker in a prepared release.
"Although we are pleased with our performance in the third quarter, the recent sales and earnings warnings announced by our component suppliers, competitors and retail partners (make) ... it prudent for us to reduce production to be consistent with a marketwide 20 percent decrease (year-over-year) in anticipated selling volumes," he added.
Last quarter, eMachines missed analysts'' estimates when it lost $47.4 million, or 33 cents a share, on sales of $124.5 million.
The stock peaked at $10 in May before falling to a low of 88 cents a share earlier this month.
Analysts are expecting a loss of 40 cents a share in the fiscal year.